How to Overcome the Construction Labor Shortage

The trade industries still have not fully recovered from the 2008 recession, which devastated the construction industry and led to a mass exodus of workers. As we enter 2017, construction is in high demand, but the supply of skilled workers remains low. As a result, there are 200,000 vacant positions in the industry, according to a recent study by the National Association of Homebuilders

But as is the case in any sector, if you are having trouble attracting and retaining good employees, lack of candidates might not be your only problem. In order to thrive in these times of rebuilding, owners need to up their game in terms of recruitment and management.

Here are some tips for surviving the construction labor shortage.

Expand your recruitment efforts
A recent survey by the Associated General Contractors of America finds that two-thirds of contractors say they’ve had trouble finding qualified workers. That means you’ll have to strongly consider what you’re doing – or not doing – to connect with qualified applicants.  

How have you recruited workers in the past? What job websites do you post on? Are there people or associations that have been successful in finding top talent? These are questions you should examine as you consider how to boost the number of resumes to choose from.

If you’ve gotten by in the past without the help of professional head-hunting services, you may want to consider one now, given the construction labor shortage. The Construction Recruiters Network, Aerotek and Building Team Solutions are examples of companies that specialize in connecting employers in the construction industry with qualified workers.

Refine hiring practices
While you may desperately need to hire people, it’s important to find the right talent. When the cost of replacing an employee can be up to 3x their salary, you want to do what you can to minimize further hiring, training and replacement costs for someone who isn’t the right fit.

In an industry with a labor shortage, there’s a risk of high turnover due to a competitive job market. If you are experiencing these issues, consider new approaches to interviewing and analyzing prospective employees. Luckily, there are tons of online resources that offer evidence-based methods for reviewing resumes and conducting pre-employment interviews.

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Contemplate compensation
Once you've found and hired the right employees, it's important to consider how you will motivate and retain them. It’s undoubtedly something your competitors are also thinking about.

Put yourself in the shoes of your employees to try and determine what would impel them to choose your company over other employers. For example, what is the current standard for wages and salaries? What are other employers providing in terms of benefits? How do you stack up in terms of employee satisfaction and retention? With some perseverance, you should be able to make these assessments relatively easily.

It’s inevitable that you’ll have some workers choose to move on to other jobs. When that happens, you should ask have a solid exit interview process in place. Sit down with the employee and have a candid conversation, asking them about their decision to work elsewhere. Why did they decide to leave? Are there any other benefits or perks they will be getting with the new company? Did they feel motivated and inspired at work? These insights can help you improve your employee compensation and retention policies.

Encourage more communication with employees
The tougher it is to hire and retain top talent, the more important it is to keep employees happily in place for as long as possible. Pay and benefits will obviously play an important role, but that’s just one piece of effective employee management.

Business leaders have identified the importance of a strong organizational culture being critical to success. In a recent survey of over 20,000 workers worldwide in over 50 major companies, it was concluded that why we work determines how well we work. While there’s no magic formula for creating the ideal culture, what has become evident is the vital role that open communication plays in helping people understand the value and impact they have within the company.

Simply providing an open and respectful line of communication can go a long way in creating a positive and productive workplace where everyone contributes. For companies with high-performing cultures, ease of communication results in long-term competitive advantages.

Improve safety
Keeping employees healthy is just as important (as keeping them happy) when you’re struggling to retain staff members. Construction-related injuries are still a major issue that continues to take a heavy physical, psychological and financial toll on the industry.

Injured employees have to take time off work and the domino effect – workmans' compensation payments, higher insurance premiums and man hours spent recruiting a replacement worker – can devastate a business. Additionally, it might reduce worker morale, especially if there are concerns among workers that the injury was the result of negligence on the part of the employer. If workers start questioning their own safety, the results can be disastrous. 

If you haven’t put some thought into safety improvements in recent years, consider some of the promising new trends that builders are using to keep employees out of harm’s way. New technology – like drones that can perform particularly dangerous jobs – or geofencing systems that will notify workers to stay out of dangerous places, can play an important role in enhancing safety on your construction sites.

Review hours and manage your workers
If the construction labor shortage has forced you to raise wages, you have a greater incentive than ever before to closely track your workers’ hours. You’ll want a comprehensive employee time tracking system that accuately monitors your employees hours and locations. With Timesheet Mobile’s GPS-enabled time tracking, you can easily accomplish that. Try it for your business. Risk free for an entire month.

Precise online timesheets help you manage your overtime costs and conduct deep-level analysis of your employees’ work behaviors. This type of insight can help you optimize productivity by better understanding the timing of your projects. You will also gain insight as to whether you're over or understaffed and exactly where workers are spending their time. 

Whenever your existing business model is challenged, it’s always best to carefully evaluate your current approach and think critically about changes that need to be made. Businesses that are willing to constantly scrutinize their practices and consider ways to improve are the ones that will thrive in spite of obstacles, including labor shortages.

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